Knight Frank has released their quarterly analysis of vacant industrial space along the eastern seaboard of Australia, showing a rise of 12% over the last quarter.
There was an increase in vacant industrial space in Melbourne over the past quarter, while Sydney recorded its second consecutive quarterly rise in vacancy. Brisbane recorded a modest decline over the quarter however it is expected to join the other cities with higher levels of available vacant space over the coming quarter.
Total Vacancy on the Eastern Seaboard remains flat over the past year (to July 2012)
This increase in available space has arisen as a result of the increased supply pipeline, to date predominantly in Sydney and Melbourne where larger tenants are relocating to design and construct (D&C) building projects or into new speculatively developed accommodation, leaving sometimes significant chunks of space vacant.
The Brisbane market is expected to follow suit over the next quarter, largely due to D&C projects as the speculative development starts have remained scarce.
Take-up of vacant space across the eastern seaboard was 9 per cent higher over the six months to July 2012 (71 buildings over 554,272sq m) as opposed to the previous six months. All three cities recorded growth however Melbourne (10 per cent) and Brisbane (10 per cent) saw stronger results than Sydney (8 per cent).
- Approximately 859,992sq m of Industrial Accommodation across Sydney is available for lease.
- This increase is despite the recent improvement in take-up across the Sydney market (take-up excluding D&Cs is up 8 per cent over the past six months) as a few, large vacancies coming onto the market have outweighed this improvement in general demand.
- The precinct with highest level of vacancy is in the Outer West, however prime space only accounts for 24 per cent (106,994sq m) of this (immediately occupiable prime space is only 18 per cent, with the remainder speculative space under construction).
- Full Report: Sydney Industrial Vacancy July 2012
- Total vacancy levels fell modestly by 4 per cent over the past quarter to another record low of 170,938sq m.
- Available space remains 50 per cent below the historical average and 34 per cent below the level of vacancy that was seen one year ago.
- Despite the continued fall in total available space, the prime vacancy increased by 41 per cent over the past quarter (down 4 per cent over the past year) to account for 40 per cent of the total available space within the Brisbane market.
- The level of take-up was lower over the past quarter (12 buildings for 60,582sq m), but remained in line with recent trend levels.
- Larger tenants remain bereft of choice, with only two buildings available in the 9,000 – 10,000sq m category – with none larger currently available.
- Full Report: Brisbane Industrial Vacancy July 2012
- Approximately 378,077sq m of industrial accommodation across Melbourne is available for lease
- Vacancy levels in July 2012 reflect a 27 per cent increase from the low-point of April 2012, but this still reflects 14 per cent fall over the past year
- Take-up was 112,299sq m during the 3 months to July and this remains constrained by the relatively limited stock.
- Full Report: Melbourne Industrial Vacancy July 2012